The full, accurate, and timely disclosure of information of the American markets offers an array of indicators and allows deep insights of prevailing attitude. You find the activities of NYSE members like specialists and floor traders, public and odd lot short sales, the Short Interest Ratio as well as the large block transactions of the institutional investors published every week.

Other tools for technical analysis include trend indicators, daily advances and declines, daily new highs and lows, volume, indices, put/call ratios and other useful information like Stochastics, RSI, MACD, TICK and more. The problem is only that all these indicators contradict each other most of the time.

Innumerable books have been written on this subject, and no matter how many will be written in the future: always be aware that there is no such thing as the Holy Grail of the stock market. But some people are more successful than others and the answer is quite simple: No indicator is right all the time and you don't have to be right all the time. Just be right a higher percentage of the time than wrong.

Choose some reliable indicators and stick to them. Don't follow some indicators for a while and switch to some others if they fail. Don't be a technician in the first half of the year and a fundamentalist the next half.

Be consistent and disciplined in your approach. Don't abandon a good indicator because you think this time everything is different. It takes of course a lot of guts because the opinions of the most widely quoted gurus of Wall Street are usually contrary to your indicators at that time. This is much easier if you don't use margin. You will sleep a lot better if you buy 100-shares of IBM with the money you can spare than 300-shares on credit.

The Smart Money Flow Index has long been one of the best kept secrets of Wall Street. Everybody knows the importance of a closing price and other last hour indicators like the Closing Tick, which we publish daily for free on our portal. The Smart Money Flow Index is therefore calculated by taking the action of the Dow in two time periods: the first 30 minutes and the close. The first 30 minutes represent emotional buying, driven by greed and fear of the crowd based on good and bad news. There is also a lot of buying on market orders and short covering at the opening. Smart money waits until the end and they very often test the market before by shorting heavily just to see how the market reacts. Then they move in the big way. These heavy hitters also have the best possible information available to them and they do have the edge on all the other market participants. The Smart Money Indicator is calculated like the Advance-Decline Line. You can easily do it yourself if you don't want to pay our subscription rate of $1.50 weekly (based on a 6-month membership). Just start at any given day, subtract the price of the Dow at 10 AM from the previous day's close and add today's closing price. The result is plotted on a chart, together with the closing price of the Dow only. Whenever the Dow makes a high which is not confirmed by the SMI there is trouble ahead (chart below). Watch the divergence around June 1998, February 2000 and September 2000. Watching this indicator is like being on a plane and see the pilots jumping off with parachutes. This indicator is suitable only for investors with a longer time horizon. Such investors should buy blue chips when the indicator gives a buy signal, and sell and sell short on a divergence.

The Smart Money Flow Index has long been one of the best kept secrets of Wall Street. Everybody knows the importance of a closing price and other last hour indicators like the Closing Tick, which we publish daily for free on our portal. The Smart Money Flow Index is therefore calculated by taking the action of the Dow in two time periods: the first 30 minutes and the close. The first 30 minutes represent emotional buying, driven by greed and fear of the crowd based on good and bad news. There is also a lot of buying on market orders and short covering at the opening. Smart money waits until the end and they very often test the market before by shorting heavily just to see how the market reacts. Then they move in the big way. These heavy hitters also have the best possible information available to them and they do have the edge on all the other market participants. The Smart Money Indicator is calculated like the Advance-Decline Line. You can easily do it yourself if you don't want to pay our subscription rate of $1.50 weekly (based on a 6-month membership). Just start at any given day, subtract the price of the Dow at 10 AM from the previous day's close and add today's closing price. The result is plotted on a chart, together with the closing price of the Dow only. Whenever the Dow makes a high which is not confirmed by the SMI there is trouble ahead (chart below). Watch the divergence around June 1998, February 2000 and September 2000. Watching this indicator is like being on a plane and see the pilots jumping off with parachutes. This indicator is suitable only for investors with a longer time horizon. Such investors should buy blue chips when the indicator gives a buy signal, and sell and sell short on a divergence.

The Commodity Futures Trading Commission (CFTC) provides inside information about purchases and sales of futures contracts. The largest players in each market are required to disclose their positions to the CFTC on a daily basis and this report is released weekly on Friday afternoon (the reporting requirement varies by commodity). These traders are separated into Commercial Hedgers and Large Speculators.

The positions of Small Traders are calculated by subtracting the total of contracts held by the reporting groups from all the contracts outstanding (Small Traders are not required to report their positions). Commercial Hedgers hold a significant informational edge over other traders as far as fundamental supply-and-demand statistics are concerned. They tend to be early, but they are usually right on the long run, quite contrary to the small traders. Extreme divergences in long and short positions of Small Traders, Large Speculators and Commercial Hedgers have proven to be reliable indicators of important trend changes. In such cases it is not advisable to bet against the Commercial Hedgers. All other patterns are meaningless. The following charts show you the positions of these three groups of market participants. A 10-week moving average is applied to smooth out the swings.

Three different charts are available for each commodity:

• Short positions of all market participants (Large Speculators, Commercial Hedgers, Small Traders) on a percentage basis.
• Short positions of Small Traders only. Significant changes in those numbers give you an insight about prevailing sentiment.
• The Long/Short Ratio of Small Traders. This chart is computed by dividing the long and short positions of Small Traders. High readings indicate heavy buying by Small Traders which is bearish.